Be Your Own Bank: Cash Value Life Insurance, Tax Strategy & Wealth Protection with Alan Porter

Alan Porter (00:00)
But here’s one of the big things that I do with life insurance. I become my own bank. I borrow from myself and pay myself back compound interest and not the financial institutions. Let me explain. In your cash value life insurance policies, whether it’s whole life or indexed universal life, you have your cash value and then you have your death benefit, which is hundreds of thousands if not millions of dollars more. I’ve done this for 15 years. I just bought a car for my wife.

I borrowed $50,000 from my insurance policy. Now let’s just say it’s $100,000 and let’s say the death benefit is a million dollars. All right. I brought that $50,000 from my cash value. That $100,000 continues to compound. All this $50,000 is a lien against the death benefit. I don’t even have to pay it back if I don’t want to.

Dylan Silver (02:18)
Hey folks, welcome back to the show. Today we’re joined by Alan Porter, former Blackhawk helicopter pilot, turned financial advisor and founder of Strategic Wealth Strategies. Alan brings a disciplined strategic mindset, helping individuals and business owners think differently about how they build, structure and protect their wealth. His approach emphasizes clarity, control and long-term decision-making, focusing on creating sustainable growth rather than short-term wins. Welcome to the show, Alan.

Alan Porter (02:44)
Well thank you, I very much appreciate being invited.

Dylan Silver (02:48)
Now, when we talk about just general foundation steps that people can take right now to secure their financial future, I was mentioning in the green room that unfortunately, sometimes people don’t act until it’s too late or until their backs up against the wall. But what things can people do right now so that they don’t have to wait until that situation happens?

Alan Porter (03:14)
Well, one of the things I’ve learned and why I got into this business, like I said, I was a black office structure pilot, had a successful real estate mortgage business, but had some tragic things happen to my family. My son was a hunter, completely disabled for over three years before he got any money from a disability. And his wife was working in a hospital, January 5th changed my entire life, 2010. She called me, she said, Allen, I’ve been diagnosed with stage four pancreatic cancer and they’ve given me six months to live.

And of course, we were devastated, but I was like 99 % of the people out here that thought life insurance was a death product that you had to die to benefit from it. Well, there’s no money coming in. I’m trying to help him out. But little did I know there was a, she had a terminal illness right in her life insurance policy that let her access the death benefit within one year of diagnosis, which was in the hundreds of thousands of dollars, completely tax free, which I knew nothing about. And if it had not been for that, my son would be bankrupt. That took a huge financial strain off of me. Well, my problems didn’t end there. She died a year later.

But my daughter, who’s an oncology nurse, who gave birth to my third grandson, was diagnosed with breast cancer and almost died. And the last treatment she had was over $245,000 for an infusion. If it had not been for insurance, my family would be financially devastated. So people need to, they have the wrong idea about insurance. Insurance protects the family. That’s your number one thing people need to do. You need to protect your family. And if I had not had…

the training that I’ve done, just when I learned from my daughter-in-law, like I said, I’d be bankrupt.

Dylan Silver (04:45)
Now you mentioned the rider that was attached to that policy so that you could receive living benefits. When folks are looking at life insurance of all varieties, how important is that type of rider? And is that something that’s rather common or is it uncommon?

Alan Porter (05:04)
No, it’s common, but people need to understand it. With that writer, that saved my son from bankruptcy, like I said. But we also have long-term care writers. Long-term care right now costs between $50,000 to $200,000 a year. 70 % of all Americans will need long-term care at some point in their life. And 40 % of all Americans right now between the ages of 18 and 64 are on long-term care. It goes up by 6 % every year. People’s fortune, I mean, their financial…

future will be decimated. They have no idea what long-term care will do to their assets.

Dylan Silver (06:28)
You know, it’s something that I think most, again, most people aren’t thinking about because they’re thinking, okay, well, kind of, I’ve got enough on my plate right now. If that happens, I’ll cross that bridge when I get to it. But then of course, your costs go up. That’s my understanding, right? It’s better to get this coverage in place before it happens, because you’re able to do it at a more cost effective rate.

Alan Porter (06:46)
Yeah.

Absolutely. I didn’t do this. I’m 73. I didn’t start my policies until I was 58 after this happened to my daughter-in-law. If I’d have done this while I was in my 20s, I wouldn’t be doing this now. I’d be on some beach living the good life. But I love what I do. I’ll never retire unless something happens to my mind. But I love what I do. I’m very passionate about it. But people don’t understand. They’ve all been innuendated by the propaganda of Wall Street and certain advisors that the only place to say for your

401k or your retirement plan is in a 401k. But I’ve got on tape the founder of the 401k Ted Bina says is a disaster needs to be replaced. The average fee in a 401k dialing is over 2.99 % and that’s by Forbes magazine a lap time. People will lose half of their money and then they hit with taxes anywhere from 20 to over 55 % and they’ll be out of money anywhere from the the fifth to the ninth year. The average 401k only lasts about five to seven years.

And all it does, a 401k does, is compound the risk in retirement, such as sequence of returns risk, which 99 % of the people do not know about. number one fear of retirement is running out of money before you run out of life. Government risk, tax risk, the taxation of social security and the means testing for Medicare Part B and IRMA taxes, which can be tens of thousands of dollars per year for high income individuals, which are protected from lawsuits, liens and judgments. It avoids probate.

It eliminates or mitigates all the risks in retirement, just like with long-term care. You’re paying for long-term care for pennies on the dollar with tax-free money.

Dylan Silver (08:31)
Now, does that mean that there’s not a place for IRAs or is it you you might want to have an IRA but you might want to diversify your long term retirement strategy?

Alan Porter (08:43)
Listen, I’m not against a stock portfolio whatsoever. Okay. But people need to understand it’s not about rate of return and retirement. It’s about distribution of your assets. You know, for, you know, an IRA, you got a stock portfolio or you’re 65, a million dollars supposed to be a 4 % distribution rate index for inflation at 3 % supposed to last for 30 years. Well, all my plans go to age 120 or till death, till death. If anything’s left in accumulation value, it goes to the beneficiaries. But the big thing too.

is with that million dollars at 65, you’d only need approximately $650,000 in certain fixed index annuities to give you the same $40,000 a year with increasing income and a guarantee never to have a loss to the market downturn and long-term care options. That leaves you $350,000 to turn it into a Roth and now eliminate more risk in retirement.

Dylan Silver (09:34)
Yeah, and I think

One of the things that I think is tricky for especially young people, because a lot of people frankly are trying to figure out, hey, how am I going to get into a house? How am I going to get my first investments? Right. And they’re not thinking long-term about what if something happens? And it’s almost, I don’t want to say a level of learned helplessness, but it can be challenging for folks when they’re like, hey, I’m just trying to get by or, hey, I’m just trying to get through this flip, et cetera. And I think people do have to pump the brakes here and say, hey, I know that I’ve got a lot of spinning plates in the air.

but let’s take some time, let’s take a week or whatever it is to get my affairs in order because if something does happen, I wanna have everything be said.

Alan Porter (10:48)
Exactly right. I’ll give you a perfect example. This couple, they’re 67 and they’re retired. They got like five million dollars. They have a son that’s 42. He had four kids. A wife that doesn’t work. He died of a heart attack in his driveway washing his car. Now who do you think is going to raise those kids?

Dylan Silver (11:04)
The grandparents. Yeah.

Alan Porter (11:04)
Yes, the grandparents, exactly right.

But here’s one of the big things that I do with life insurance. I become my own bank. I borrow from myself and pay myself back compound interest and not the financial institutions. Let me explain. In your cash value life insurance policies, whether it’s whole life or indexed universal life, you have your cash value and then you have your death benefit, which is hundreds of thousands if not millions of dollars more. I’ve done this for 15 years. I just bought a car for my wife.

I borrowed $50,000 from my insurance policy. Now let’s just say it’s $100,000 and let’s say the death benefit is a million dollars. All right. I brought that $50,000 from my cash value. That $100,000 continues to compound. All this $50,000 is a lien against the death benefit. I don’t even have to pay it back if I don’t want to.

Now it grows interest. But what I’m doing, let’s say it’s a 0 % interest for 50 months.

So what I do is I pay myself back. I’m going to pay it off in a year anyway. But let’s say I paid a thousand dollars a month for 50 months. Now, if I paid that to a bank, that thousand dollars, that money’s gone for me forever. It will never compound for me. But when I pay myself back compound interest for myself, now that hundred thousand dollars is not only compounding, but the thousand dollars I put in every month compounds on top of that. It’s one of the greatest financial vehicles in the world. And why everybody doesn’t do this, I don’t know.

Dylan Silver (12:25)
Get your own back.

Alan Porter (12:29)
but you’ve got to build up.

Dylan Silver (12:29)
Is ⁓

there a barrier to entry for that? Like a minimum amount you need to put up front in order to get that started?

Alan Porter (12:37)
Well, the thing is you’ve got to let it grow. I mean, you can’t put money in and in three years, expect to take a take a loan from it. I want people to maybe six, six, six years down the road. I do this with some real estate investors. They don’t go when they get the foot, they get money for do a flip. They get that they sell the house, pay the loan off. They do it again. It just keeps on rolling. It’s one of the greatest things in the world.

Dylan Silver (13:02)
I would like to dive in a little bit here and talk about some real estate strategies and how they intersect with with tax strategy. I’ve heard a lot of people recently talking about cost segregation. you know, right now, recently, it seems like because of the big, beautiful bill, you have more people who are trying to get that full time real estate operator status and take advantage of some tax savings. Do you see more people, especially real estate investors,

looking into, how can I save more on my taxes, whether it’s through that full-time real estate investor status, through cost seg, or through a number of other strategies.

Alan Porter (13:44)
Well, first off, I have a team of specialists I work with. And what I mean by specialist, let’s say I’m your family doctor. I can treat you for minor illnesses, minor injuries, but if you want your knee operated on, you want the orthopedic surgeon specialist. And that’s what I have in my team, tax-specific attorneys, CPAs, and other specialists in their fields. And we do strategies to, and we collaborate together to do strategies for people’s financial problems. We show people how to reduce and possibly eliminate both debt and taxes. We do tax strategies. ⁓

possibly tax-free income, tax planning, and the strategies like I mentioned before, but we do asset protection and business exit strategies. And I asked my people about business exit strategies. I said, would you rather pay capital gains tax or get a tax deduction? Well, I want to pay, I want to get a tax deduction, Alan, but how do you do that? Well, it’s not how I do it. It’s how my team does it. And that’s why we collaborate together. But we do charitable gifting, legacy planning.

Health care, reduce health care costs. I mean, the list goes on and on what my team does. I’ve got a whole team of people that we’ve collaborated together with. They’re all specialists.

Dylan Silver (14:50)
When we talk about the kind of vertical integration of everything that you’re doing from the financial advising tax strategy, the life insurance arm of it, what’s the biggest mistake or incorrect belief that you see people coming to you? That’s just flat out wrong.

Alan Porter (15:07)
cough

Well, first off, they don’t believe in life insurance because they’ve been told the wrong information the whole time. And the other big thing, especially when I talked to them about tax strategies, well, why hasn’t my CPA or my advisor ever told me or my attorney ever told me about this? I have two questions for them. I said, when’s the last time any of your advisors ever give you any proactive advice on saving taxes? It’s slim to never. And the other question I got for them, and listen, I’m not here to replace anybody’s advisor, but I want to work with them as a team to give you the best possible scenario.

But the other question I have for them, I say, you may have the greatest tax advisors in the world, but it’s what they don’t know that’s going to end up costing you hundreds of thousands, if not millions of dollars in undue taxes, fees, and lost opportunity costs. Now, I just had a doctor, he missed out on a million dollar payday because his CPA firm said our tax strategies were not wrong. Our tax strategies aren’t wrong. We don’t operate in the gray area.

Dylan Silver (16:34)
Yeah.

Alan Porter (16:50)
Okay. I’ve got a tax company, a tax strategy company. They sell for four billion dollars in income saving taxes over the last, I think it’s five to six years. We just got all our taxes, ⁓ our tax strategies vetted for 2026. And there’s a bunch of them. Some of them not, you know, we use last year. We can’t use this year, but there’s other ones out there and people need to take advantage of it and don’t rely on what your CPA, your attorney say.

Are they the specialist? No, they’re not the specialist. That’s the big thing, ⁓ big, big thing that people need to understand. And some of these people have been with their advisor for 30 and 40 years and they don’t want to hurt their feelings. Well, I’m sorry, but how much do you want to pay him to not hurt your feelings?

Dylan Silver (17:39)
You know, the thing that’s challenging about all these fields is that they’re changing all the time and certainly year to year, right? And so for folks to think that someone that they’ve been with for a long time, you know, just out of pure loyalty, if they’re not keeping up with what’s current today, they could be missing out on literally, you know, 20, 30, 40, 50 % additional tax savings just because of some additional knowledge that the person that they’re working with isn’t privy to.

Alan Porter (18:08)
I got a case that this guy was a referral to me. He’s retired Dennis. He’s only 51. He sold his practice down to Hilton Head for $8.3 million. We’re going to pay most of the taxes or get it all the way down to a 10 % tax bracket over the next four years for that particular scenario. But I did a tax strategy for him last night or last year and we were recovering $2,280,000 in taxes he’s paid over the last three years.

Also, what we’ve done is we’ve turned his 401k, his qualified plans, $1.4 million, paid all the taxes on him and the penalties since he’s only 51 and turned it into cash value life insurance that’s tax free. It doesn’t just create a legacy for his immediate family, but this is generational income when planned and executed properly. I mean, it’s tens of millions of dollars of tax free money. That’s more than he

would ever have before with the plan he was doing. he said, Alan, says, you’ve changed my entire life, but why don’t people know about this? Like I say all the time, if you think it’s too good to be true, it’s not too good to be true, it’s too good to be free because there’s a cost to doing everything. And here’s the thing, there’s a cost for doing something and there’s a cost for not doing something. But that cost for not doing something is far greater than the cost for doing something.

Dylan Silver (19:09)
Hmm.

Yeah, no question. mean, I think it’s just one connection away, especially in the real estate space, one connection away, one key piece of information that can totally change the trajectory of someone’s business. And even in that case, someone with high net worth realizing that, look, if I had had this, you know, potentially prior, this would have been great, but super grateful to have it now, even after selling his business. Like, wherever you can get in, that’s the time to get in.

Alan Porter (20:01)
You know, the thing is, I’ve got a lady right now that’s been in the 1031 exchange business for over 31 years. She knows it like the back of her hand. She’d been to Supreme Court twice, I think, and they all ruled in her favor. But she’s just part of my team. But the thing is, people need to understand. You don’t know what you don’t know. And this is where we come. You know, I don’t charge my consultations. I want to educate people on what’s out there.

What I do is I teach them to think outside the box of conventional financial planning. Show them the strategies the wealthy and the banking institutions have been using for years. You know, they use them, why can’t we?

Dylan Silver (20:41)
Yeah, yeah, you know, I think that’s that’s exactly right. Make that connection and be your own bank. Right. We are coming up on time here, Alan. Any new projects that you’re working on and then as well, what’s the best way for folks to reach out to you?

Alan Porter (20:49)
Okay.

Well, again, there’s always tax strategies out but not only, but you need to protect your family. You do that through life insurance, cash value, life insurance, not term insurance, cash value, life insurance, whether it’s whole life or index universal. You can call me at nine one zero five five one one zero four six, or email me at strategic wealth, the number zero at gmail.com. But you can also go to my website, which is www strategic wealth strategies.com. And I’ve got a.

plethora of information in there. I’ve a YouTube channel on there. I’ve got over 500 videos. They’re anywhere from 26 seconds long to over 18 minutes long. But they’re all educational. And people need to take advantage of the education that’s out there. And that could be the greatest 10 minutes of your life.

Dylan Silver (21:41)
Absolutely. Alan, thank you so much for joining us today. Thank you for your time.

Alan Porter (21:45)
Well, I appreciate it and I hope people are interested in what I have to say. Please give me a call. Like I said, I don’t charge my consultations.